Panel 3: The Scope of Exclusive Rights and Modes of Enforcement

29th Annual BTLJ-BCLT Spring Symposium: Origins, Evolution, and Possible Futures of the 1976 Copyright Act

Erik Stallman, UC Berkeley Law (Moderator)

Christopher Sprigman, NYU Law: Restatement of ©: assumes perspective of common law court, attentive to and respectful of precedent but not bound by precedents that conflict w/the law as a whole. Reporter is supposed not just to go w/greater numbers of cases but with the better principle, with explanations.

Statute in many central provisions is far from clear or fully prescriptive—Congress left ample room for judicial interpretation: 102(b), 107, rules of secondary liability, standard by which infringement is judged: these are not peripheral, but Congress said next to nothing or even nothing about them. Courts have built an intricate architecture of common law doctrines around the skeleton of the statute over the past 50 years.

It’s ©’s hybrid nature, enabled by spaces left open by Congress, that has kept © vital through huge changes.

Restatement makes use of legislative history as a window on the meaning of statutory language, principally where courts have disagreed. The window can be clouded, and we approach the enterprise w/caution—not the same as rejecting legislative history. Fair use is a good example: commercial/nonprofit distinction is just one facet of analysis of purpose and character, inviting judicial development.

Fair use is “not an infringement of copyright.” What’s the burden? Legislative history: Statutory presumptions/burdens of proof are not justified—the intention was to allow the courts to make individualized decisions. The courts have uniformly held, w/o analysis, that the BOP on fair use is on the defendant. Seems inconsistent w/ statutory language and expectations. Personal view: Reconsideration of this is overdue. Fair use is a scope doctrine about the © owner’s rights in the first instance. It’s ordinarily, for good practical reasons, the defendant’s burden to raise the issue, just as with idea/expression. But the scope issue should then be decided by the court as a matter of law.

Claim about fair use tension w/derivative works have always seemed to him to prove too much. © owner’s exclusive right to prepare derivative works is subject to fair use. Goldsmith: They aren’t mutually exclusive, but neither do they always overlap. To reconcile the statutory provisions, the Court held that the degree of transformation must go beyond that required to create a derivative works, noting that some transformations occur in purpose w/o physical alterations to content of work. Goldsmith: W/transformations that do alter content, to qualify as “transformative” for fair use, the D’s use must involve more than distinguishable variation but must rise to a level to distinguish its purpose & character from that of the purpose & character of the original. Broadly correct.

Oren Bracha, University of Texas at Austin, School of Law: For 40 years, the infringement test has been eroded and dilution, vacated of most of its substantive content, most importantly its central conception that supplied coherence, which existed beforehand. That was the idea of substitution: to infringe, a defendant’s work had to expressively substitute for the plaintiff’s work. Of course there were hard cases but this was an organizing principle that provided meaning.

Courts hollowed out the test from that notion of substitution, leaving us w/a nebulous, frictionless idea of substantial similarity that means very little. Once that happened, the test became unpredictable, arbitrary, etc. It is us, meaning the case law, that did this, and therein lies the problem.

Once that happened, additional unfortunate developments: (1) the very confused and unfortunately more widespread tendency of some courts to describe the infringement test as having an exception for de minimis uses. A confusion of relevant concepts. Once that happened, other courts very quickly understood this as a criterion of unrecognizability: no substantial similarity when it’s de minimis, and it’s de minimis when one can’t recognize the P’s work—a race to the bottom. (2) Alternative infringement tests develop: the quality/quantity 2d Circuit test that applies when the regular test is inapt, that is, when it doesn’t produce the outcome “infringement.”

After we hollow out the meaning of the infringement test, what steps into the vacuum is the fair use doctrine. The idea is simple: if infringement means very little/subjective, you don’t need to worry about it, b/c we can always fix it w/fair use. Don’t even have to do the infringement test! The back end becomes the front end. Warhol v. Goldsmith: substantial similarity became a footnote—ignored by the dct, a sentence at the 2d Circuit, abandoned at the Supreme Court.

Not an enemy of fair use, but this is abnormal and ungood. We’re putting too much burden on the too-narrow shoulders of fair use. We’ve shifted a lot of the burden of scope analysis to fair use. Basic mismatch between its concept and the burden we’re making it bear—at the end it won’t work very well.

Relatedly, courts ignore the difference b/t reproduction & derivative works and don’t bother to tell us which is which. Derivative works is a freewheeling concept—any secondary valuable use of the work—so the boundary is unclear.

Fixes: meaningful infringement test. His would be along the lines of expressive substitution. Once we’ve done that but only once we’ve done that, we should cut fair use down to size. And we should fix the derivative work/reproduction situation: the derivative work right should be a right of making adaptations, not a freewheeling boundaryless idea.

Justin Hughes, Loyola Law School: Contributory liability after Cox: What the hell?

Assumptions inherited from 1909 Act & FRCP—many secondarily liable parties should only be liable for damages. That has produced a major divergence b/t US and other developed economies w/sophisticated © schemes. W/exposure to damages in mind, there were 2 distinct branches of secondary liability—vicarious & contributory. 2d Circuit’s 1963 Shapiro Bernstein case crystallized the vicarious standards outside the employer/employee context: right and ability to supervise plus obvious and direct financial interest in the exploitation of copyrighted materials, even in the absence of knowledge. The House Report added “indirect” to its description of vicarious liability. Meanwhile, contributory liability came from a case about a preparer of a motion picture held liable for the exhibitors’ public performances.

Cox v. Sony: ignored previous case law; contributory liability requires intent that can be shown only by inducement or that the provided service is tailored to the infringement. [FWIW I think that a court could easily find that continuing to host a particular piece of content is tailored to the infringement once there’s been notice of a claim. I think it’s fundamentally different to deal with a series of possibly continuing infringements versus one ongoing infringement.]

Legislative history: used “to authorize” in 106 to avoid any questions about liability of contributory infringers. For example: A person who lawfully acquires an authorized copy of a motion picture could infringe if they engage in the business of renting it to others for unauthorized public performance.

Litman is right: Statutory damages for single infringement is not palatable applied to contributory infringers, and that’s a problem for our system. Big mistake either in the Act or our understanding of it. Other systems permit injunctions against third parties w/o holding them financially responsible.

Fascinated by SCt’s obsession w/making patent & © into kissing cousins. But what about TM and Inwood? [I think it’s bigger than that—the Court wants a trans-substantive rule about equitable doctrines including contributory liability, which is why everyone in Cox was citing Taamneh.]

Laura Heymann, William & Mary Law School: Dividing lines b/t doctrines: Dastar and Star Athletica both don’t give great guides to distinguishing ©/TM and ©/design patent respectively. Maybe that’s the result of unusual facts. Wal-Mart specifically invited rightsowners to use © and design protection while building up secondary meaning required for trade dress rights. Doesn’t favor election, but use of doctrines on back end to deal with end-runs around limits on other rights and use of remedies, such as the apparently revived interest in disclaimers.

Congress could also try a more intentional positive description of the public domain to tell us how that interacts w/other IP doctrines. Another way: Court’s own reasoning when it borrows from patent law. Is Court looking at purposes behind the doctrines it borrows from? We call the field “IP” and try to generate unifying themes, but not clear that Court or Congress keeps those in mind. Is “staple article of commerce” a phrase used to indicate a core doctrinal concept or just a convenient borrowing? Sony v. Universal took pains to distinguish Inwood, rejecting kinship b/t © and TM. Blackmun’s dissent disagreed with the comparison to patent. Path dependence: that borrowing in Sony now goes unexamined in Cox. Not every member of the Court is committed to the project of legal explanation. [That’s one way to say it!]

Q: re burden of proof.

Sprigman: Law is clearly established until it isn’t. We have to prepare the world for what might come next. Our Court is not respectful of precedent and very bound by text. They’re unashamed to disrupt settled expectations [of certain kinds].

Bracha: it would be an improvement; fair use started life as part of the infringement test. It still wouldn’t be a good fit to have fair use as the central mediator of scope.

Discussion of Cox/AI. Heymann points out that questions of who is responsible for infringing outputs will be key, and the Court’s opinion isn’t helpful in categorizing responsibility for direct infringement.

Sprigman: © should stay in its lane (even if Congress is dysfunctional); we’re testing the limits of what courts can do. Maybe labor law, products liability, tax law are more important for AI.

Stallman: maybe patent & © were more convergent before 1976 Act which gave protection on fixation; before that both regimes were oriented around disclosure.

Pam Samuelson: we’re in a bit of a muddle b/c inducement is a separate doctrine in patent law but the Court said, in order to rule as it did in Grokster, that inducement was part of contributory infringement.

Cathy Gellis: Secondary liability is related to the architecture of the internet, where we depend heavily on intermediaries for speech—the First Amendment is therefore quite relevant. Fear of secondary liability has important deterrent effects. If that’s right about underlying concerns, a switch to TM will not change the dynamics.